Effect of Leadership Style on Satisfaction and Motivation of Employees - Literature review Example

The study of current organizations has shown increased interaction and separation of knowledge between the employees and the management and management as a result of poor internal communication practices adopted by the management.

Leadership is a process where leaders interrelate with their followers and try to persuade their followers in realizing their intended goals. Previous studies have identified different types of leadership. Among the common forms of leadership styles are transformational and transactional.

Transformational leadership puts emphasis on the personal growth and intrinsic motivation of their followers. This type of leadership tries to align the aspirations and needs of their followers to that of the organization. By doing that, transformational leadership nurtures the loyalty of their followers to that of the organization and inspires them to enhance their performance. In the current dynamic and complex environment, transformational leaders are seen as ultimate agents of change who can steer their followers successfully in times of high risk-taking and uncertainties (Shah, 2004).

On the other hand, transactional leadership gains legitimacy by maximizing the use of promises, praises, and rewards so as to meet the pressing needs of their supporters. They engage their supporters by rewarding them so as to achieve certain desired goals. Although transformational leadership is seen as more suitable than transactional leadership, it has been realized that such an argument is deceptive. Burns (1998) argued that all leadership is transactional, though such transactions are not limited to short-term rewards only. An effective leader has to appeal to the personal interest of the followers and make use of both short-term and long-term rewards in order to lead supporters towards the realization of organizational objectives.